Peace vs Wartime CEO

At different times in your organisation’s lifecycle, the leader will have to wear different hats to ensure it can make it through the battle; which hat do you wear??

Sceptical, paranoid and ruthlessly efficient- wartime CEOs are rarely celebrated for their transformational leadership and ability to inspire a team. Rather, they’re infamous for navigating organisations through uncertain market conditions with an iron fist. These three characteristics sum up what is known as the wartime CEO approach in modern business, which, considering the speed in which business moves, may actually prove the difference between steering your own company through rough waters or succumbing to the seas.?

Most of the time, a well-thought-out, analytical and by-the-book approach to doing business is what maintains the stability of an organisation, and ensures that steady improvement is consistently the ‘plat du jour’.

There is one problem with that perspective, though. Whether you realise it or not, you’re in a state of war with your competitors, and perhaps your organisation could be more ruthless in its attempt to capture a larger share of the market. Google was famous for having two founder-CEOs that took polar opposite approaches to leading the technology giant. Larry Page donned the white peacekeeper’s hat, while Eric Schmidt opted for a war-time helmet.?

“Success breeds complacency. Complacency breeds failure. Only the paranoid survive."

The term peace and wartime CEO was first coined by entrepreneur, venture-capitalist and author Ben Horowitz, who started a firm that was later acquired by HP for $1.6 billion. Horowitz writes in his book The Hard Thing About Hard Things that “by my calculation, I was a peacetime CEO for three days and a wartime CEO for eight years.”

In peaceful times, an organisation can focus on empowering its employees, consolidating upon its strengths and optimising in-house processes to make things more efficient. In war times, however, there is too much at stake for team building exercises, and the CEO must treat every decision as though it were an existential threat.?

Journalist and author, Hamish McKenzie once said in a keynote that Tesla is a prime example of wartime leadership and decision making. Tesla, a relatively young manufacturer, was attempting to snatch a sizable market share from established automotive marques like Ford, BMW and Mercedes Benz with its electric vehicles. Tesla aimed for nothing less than complete disruption of the passenger car industry, and has now pivoted to the commercial industry, too, with its upcoming all-electric freight trucks. The suggestion that Tesla may not have succeeded without this wartime approach is something that caught McKenzie’s attention.

“Tesla does not operate in a stable, peaceful environment. It’s operating as if it might die at?any second - which is an accurate truth. In that context, the CEO, as conceived by Horowitz is that a CEO feels like they have to be paranoid. They feel like any misstep or wrong move can put them into bankruptcy, or death. There’s a lot of people out to get them, and in Tesla’s case, there are a lot of people out to get them - whether it’s oil companies or traditional automakers or short sellers.

McKenzie concluded by saying that, in the case of Tesla, some level of paranoia and panic was justified. Horowitz would likely say that not only was this approach justified, it was absolutely existential, considering that Tesla was stepping on the toes of enemies that commanded an almost eye-wateringly large market share.?

"A peacetime CEO always has a contingency plan. A wartime CEO knows that sometimes you gotta roll a hard six."

In his book, Ben Horowitz says that times of peace don’t come easy for businesses. “Peacetime in business means those times when a company has a large advantage over the competition in its core market, and its market is growing,” he says. “In times of peace, the company can focus on expanding the market and reinforcing the company’s strengths.”?

In peacetime, leaders have the luxury of time to ask for staff input, whereas a wartime CEO takes it upon themselves to make an immediate action call. In situations like these, peacetime CEOs will often involve all the relevant stakeholders and employees for insight, whereas a wartime CEO will likely keep these decisions in a tight-knit inner circle of advisors.?

A Peacetime CEO:

• Peacetime leaders know that proper protocol leads to winning
• Focuses on the big picture and empowers their people to make detailed decisions
• Build scaleable, high-volume recruiting machines
• Spends time defining the culture
• Always has a contingency plan
• Knows what to do with a big advantage
• Thinks of competition as other ships in a big ocean that may never engage
• Aims to expand their share of market
• Strives for broad-based buy in
• Trains their staff to ensure satisfaction and career development
• Allows plans to be changed and adapted to certain market conditions

A Wartime CEO:

• Violates protocol in order to win
• Cares about even the smallest details if it interferes with a prime directive
• Builds a HR machine that recruits and lays-off staff
• Lets the war define the culture
• Is extremely paranoid about competitors, unknowns and risks
• Believes competitors are capable of kidnapping their own children
• Aims for nothing less than market domination
• Neither indulges consensus building nor tolerates disagreements
• Trains their employees so they "don't get their ass shot off in the battle"
• Does not allow for any deviation from the plan

A peacetime CEO sets big, hairy audacious goals. A wartime CEO is too busy fighting the enemy to read books written by consultants who have never managed a fruit stand."

We can see, then, that depending on the situation that you’re dealing with, adopting the paranoid mindset of a wartime CEO may help you turn your organisation’s fortunes around and confront challenging market forces head on. In terms of long- term vision, however, the wartime model of leadership can be seen as reactive to immediate threats and concerns, and lacking a long-term outlook. The reality of modern business, though, is that leadership teams need to effectively don both hats as they run through strategy sessions and management reviews, ensuring that both a conservative and aggressive approach to strategy is taken, in the best interests of the organisation and its stakeholders.?

Contributor: Alexi Falson

Originally published in our Best Practice Infinite Magazine.

Download your free copy:?https://online.bestpractice.biz/view/860721420/